Although it defies conventional logic, if MPEG-4 AVC technology became a standard form of encoding broadcast content, the lower bandwidth requirements for MPEG-4 AVC could translate into an increase in capacity usage for satellite operators.

“The first thing, which may be counter intuitive, is that the technology that we are bringing to the market, MPEG-4 AVC, actually reduces the amount of bandwidth someone needs to distribute video, whether it’s over satellite, IP or fiber,” Bob Wilson, chairman and CEO of Modulus Video told Satellite News. “At first glance, a satellite service provider might say, ‘that’s a bad thing for the satellite industry,’ but we think it actually has some important advantages.”

That increased capacity will come from three sources: a new pricing structure that could open up satellites as a viable transmission service to those who previously may not have been able to afford it; the telephone companies that are looking to launch IPTV services; and from increased usage in the point-to-point and backhaul markets.

New Pricing Options

The first opportunity that MPEG-4 AVC gives satellite operators is “the opportunity to create a new pricing tier and lower bit rate,” Wilson said. And since the MPEG-4 AVC encoding reduces the bandwidth requirements for broadcast-quality transmissions, this gives satellite operators “the opportunity to parcel their services into lower slices and still provide broadcast-quality video. That would enable people who typically have not thought of satellite as perhaps being economical for them” to now view satellite as an affordable option to distribute video content.

“And remember, everything we do with our new encoding technology still has the data encapsulated in the MPEG-2 transport stream so the rest of the infrastructure is the same,” Wilson added. “We have demonstrated how you can take a single MPEG-2 stream and replace it with two MPEG-4 AVC streams encapsulated in the MPEG-2 transport streams and get two channels where there was previously one.”

The Growing IPTV Market

“The telcos are rapidly deploying video services, between now and the end of this year, so they will have a triple play offering to their residential users (video, voice and data) and with very few exceptions, the vast majority of operators have announced that they are moving to MPEG-4 AVC compression for distribution [of video] to their residential customers,” Wilson said.

But while the phone companies are eying MPEG-4 AVC encoding, content providers are looking to supply the content to the telcos with the same encoding and are considering demands that the encoding remain the same throughout the distribution process.

“The content providers, particularly those at the higher end of the scale, want to be absolutely sure that the residential users get the same very-high-quality video they enjoy today from direct-to-home satellites or digital cable,” Wilson said. “We thought that they would likely have those users utilize MPEG-2 and then re-encode it in MPEG-4 and virtually without exception, the major content providers we have spoken to really do not want the phone companies to go through that extra encoding step for fear that the content is somehow impaired. They want to begin to look at services that will go directly to end users from their network operations centers right through the satellite distribution channel all the way down through the broadband networks to the set tops. That is a whole new class of distribution and transport that the satellite industry will have the benefit of.”

Backhaul Markets

The third opportunity that Wilson sees as opening is in the backhaul market, particularly for channels that specialize in live HD content.

“Currently, there are somewhere between 30 and 40 major channels for high-end content,” Wilson said. “A lot of those channels are live sports. There is discussion of doing more news that way. But the cost of the backhaul in HD is really prohibitive. It is six times more bandwidth to do high-definition television than it is to do standard-definition television. The program providers do not have a business model that would support six times the cost of this transport.”

Wilson continued, “To the extent that we could bring down the cost of this point-to-point backhaul of particularly live or near live content, I think this is an opportunity for satellite providers to either better utilize their existing capacity or fill up some of their open capacity with some high-definition backhaul.”

–Gregory Twachtman

(Bob Wilson, Modulus, 408/331-7610)